CONDITIONAL GIFT DEED AND CANCELLATION

The Hon’ble supreme court has held that a conditional gift deed and its cancellation is valid while the condition of such a gift deed is not satisfied.

Question was: whether a document styled as gift deed but admittedly executed for consideration, part of which has been paid and the balance promised to be paid, can be treated as formal document or instrument of gift. Another related question is whether a gift deed reserving the right of the donor to keep possession and right of enjoyment and enforceable after the death of the executant is a gift or a will.

A purported gift deed was executed by Donor in favor of the done, in consideration that the done will take care of her and her husband. further gift deed also clearly mentioned that the gift would take effect after the death of herself and her husband.

later on Donor who had executed the gift deed has cancelled by executing the cancelation of a gift deed. A suit came to be filed seeking for declaration of such cancellation as null and Void and to declare the donee as having right over the property under gift deed.

Under sec. 122 to 126 of Transfer of Property act 1882, mentions Gift Deed and Circumstances of gift deed. Under sec.126 of the act, Donor and donee may agree that on certain specified event the gift shall take place and such gift shall be revocable. as such in the present case as it is very clear that the Gift deed shall take place only after the death of the donor and her husband, thus it’s a revocable and gift to take place on happening of specified event.

A conditional gift with no recital of acceptance and no evidence in proof of acceptance, where possession remains with the donor as long as he is alive, does not become complete during lifetime of the donor. When a gift is incomplete and title remains with the donor the deed of gift might be cancelled.

A conditional gift only becomes complete on compliance of the conditions in the deed. That there was no completed gift of the property in question by the Donor to the Donee and the Donor was within her right in cancelling the deed.

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